The Role of Corporates in the Tourism Industry

The Role of Corporates in the Tourism Industry

What is the role of big (by New Zealand standards) corporate companies in the New Zealand Tourism scene? I think this subject needs some thinking about as we see the slow buy up and consolidation of smaller private and family owned enterprises by bigger enterprises.

These bigger enterprises include public companies, large privately-owned companies, and Maori Iwi entities.

Is there a case for concern, especially for smaller operators?

The Positives

Let’s look at the positives these large companies bring to the tourism industry.

The first thing they bring is scale. New Zealand is a small country and for the most part a long way from major overseas centres of population. Only bigger companies can realistically afford to have large cohesive marketing campaigns in those markets. The spinoff of more visitor arrivals as a consequence of these campaigns’ benefits everyone.

Second, larger companies have access to capital, whether it be for boats, planes, buses or buildings that smaller companies simply do not. This gives them capacity at peak times that would be lacking otherwise.

Third, the corporate culture creates a uniformity of delivery that is in the most part quite professional.

This all sounds good does it not?

However, the question is, what, if anything is lost by the slow consolidation of the tourism experience into the hands of fewer and larger entities?

To answer this question, we need to look outside tourism to other industries in this country where this consolidation is way more advanced.

A Good Place to Start is Food

While the aisles of supermarkets seem to be overflowing with choice, the reality is, many of these “food” items have little nutritional value, and are the products of monocultural, community, environment and soil destroying farming practices. The different brand names are owned by a small handful of truly large multinational companies.

These large multinational companies drive the price that the farmer gets to the absolute minimum, have little or no social conscience, indulge in a fair bit of greenwashing, and are driven purely by profit. These large companies are also able to exert pressure on legislators so that rules and new laws are better for them and their profits, make it harder for smaller producers to make a living, and conversely deny consumers true choice.

Another example would be the difference between McDonalds, Wendy’s, KFC or any other chain fast food outlet compared to the locally owned café that tries to offer new and exciting dishes while sourcing their ingredients from neighbouring growers. The chains offer blandness and uniformity, while the latter offers difference and heart.

I am not saying that our bigger tourism companies are like those big multi nationals, at least not yet.

At the Other End of the Scale

The New Zealand tourism industry has traditionally been the home of the small, often family, business. Over the years these operators have proven themselves to be quite entrepreneurial, bringing forth both new ideas, and refining existing products in new and exciting ways.

To name just a few of the new ideas are bungy jumping, zorbing and Maori cultural experiences. Examples of the latter are white water rafting, black water rafting, other caving experiences and whale watching.

All the above would probably never have got going without some visionary small business leader.

More graphic though is the effects that these operators have had on their often-small rural communities. These effects include local employment, and a boost to the district economy as a large percentage of spend is retained locally.

Even more important however is the connection that many of these small businesses have with both the natural environment and sense of place. This is both deeply personal and a key part of the experience they offer. This is no green washing.

The Question Is

While there is an undoubted need for some large tourism companies in New Zealand, the question is, will the continued expansion of these entities, and the consequent loss of smaller entrepreneurial enterprises be good in the long run?

I believe that our environment, our communities and our visitors stand to lose way more than what anyone, except a few shareholders, will gain if this consolidation goes the same way as what we have seen with many other industries.

What we ask is that if you are travelling, can you can look for and support the smaller business, that is not only offering something personal and different, but is also truly giving back.

They will appreciate that.

Thanks

Brian Megaw

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